If you run an electrical business with employees, employers liability insurance isn’t optional — it’s a legal requirement. Operating without it exposes you to fines of £2,500 per day. But if you’re a sole trader working alone, you probably don’t need it at all.
This guide explains exactly who needs employers liability insurance as an electrician, what it covers, how much it costs, and the rules around subcontractors that catch a lot of trades out.
Key Takeaways
- Employers liability (EL) insurance is legally required under the Employers’ Liability (Compulsory Insurance) Act 1969 if you employ anyone — including part-time workers and apprentices
- The minimum legal cover is £5 million, though most policies provide £10 million as standard
- Not having EL insurance when you’re required to carries a fine of £2,500 per day
- Sole traders who genuinely work alone with no employees are exempt from the legal requirement
- Labour-only subcontractors can sometimes count as employees — check with your insurer if you use them
- EL insurance typically costs electricians between £100 and £300 per year, depending on payroll size and trade risk
What Is Employers Liability Insurance?
Employers liability insurance covers the cost of compensation and legal fees if an employee suffers a work-related injury or illness because of your business. It’s separate from public liability insurance, which covers injuries or damage to clients and members of the public.
The distinction matters: PLI protects you against claims from people outside your workforce. EL protects you against claims from within it. You need both if you employ people.
Do Electricians Legally Need Employers Liability Insurance?
Yes — if you employ anyone. The Employers’ Liability (Compulsory Insurance) Act 1969 requires most UK businesses with employees to hold valid EL insurance. The Health and Safety Executive (HSE) enforces this requirement.
Whether you need it depends entirely on your employment situation:
| Situation | EL Insurance Required? |
|---|---|
| Sole trader, working alone | No |
| Sole trader using subcontractors (who also work for others) | Usually no |
| Sole trader using labour-only subcontractors (who work only for you) | Likely yes — check with your insurer |
| Limited company with no employees (director only) | Depends — often exempt, check with HSE |
| Any business employing one or more workers | Yes |
| Business with apprentices or trainees | Yes |
| Business using part-time or temporary staff | Yes |
The HSE publishes detailed guidance on who is exempt. For most electricians who take on any help — even a part-timer — the legal requirement kicks in.
What Does Employers Liability Insurance Cover?
EL insurance covers compensation claims and legal costs when an employee is injured, becomes ill, or dies as a result of their work. For electrical contractors, the risks include:
| Scenario | Covered? |
|---|---|
| Employee receives an electric shock on site | Yes |
| Employee develops a work-related condition (e.g. repetitive strain, hearing loss) | Yes |
| Employee falls from a ladder or working at height | Yes |
| Employee is injured in a road accident while driving for work | Depends — may need separate motor cover |
| Employee is injured off-site, unrelated to work | No |
| Damage to a client’s property caused by an employee | No — this is PLI |
| Employee’s tools are stolen | No — this needs tools insurance |
The cover pays out even if the incident was partly the employee’s fault. That’s important in practice: electrical work involves genuine hazards, and a claim can easily run into six figures for serious injuries.
The Subcontractor Grey Area
This is where many electrical businesses get caught out.
If you hire subcontractors who work exclusively for you — they turn up when you tell them to, use your equipment, and don’t work for other businesses — HMRC and the HSE may classify them as “workers” for insurance and tax purposes. In that situation, EL insurance is required even though you’ve called them subcontractors on paper.
The test isn’t the job title or the contract wording. It’s the reality of the working relationship:
- Do they set their own hours, or do you?
- Do they use their own tools and equipment?
- Do they work for other employers at the same time?
- Do they bear any financial risk of the work going wrong?
Genuine subcontractors — registered businesses who work across multiple clients, use their own tools, and carry their own insurance — generally don’t create an EL obligation. Labour-only subbies who work exclusively for you often do. Check with your insurer before assuming you’re exempt.
How Much Does Employers Liability Insurance Cost for Electricians?
EL insurance cost is driven mainly by your total annual payroll, the number of employees, and the nature of the work. Electrical contracting sits in a moderate-to-higher risk bracket because of the inherent hazards involved.
| Business Size | Approximate Annual Cost |
|---|---|
| 1 employee (part-time) | £80–£150 |
| 1–2 full-time employees | £150–£300 |
| 3–5 employees | £300–£600 |
| 6–10 employees | £600–£1,200+ |
| Larger teams | Based on payroll — get quotes |
Most electrical contractors buy EL as part of a combined tradesperson insurance package alongside public liability. This is usually cheaper than buying policies separately, and it simplifies your admin — one renewal date, one insurer, one certificate.
The Fine for Not Having It
The HSE can inspect your EL insurance at any time. If you’re required to have it and you don’t:
- £2,500 fine per day you’re without valid insurance
- £1,000 fine for failing to display the certificate of insurance (either physically at your business premises or electronically where staff can access it)
According to the HSE, the certificate must be made available to any employee who requests it. It doesn’t need to be printed and pinned to a wall if you work remotely, but it must be accessible — a shared folder or HR system is fine.
The HSE actively checks compliance, particularly following workplace accidents. If a claim is made and you don’t have valid cover, you face both the fine and personal liability for any compensation awarded.
How to Get Employers Liability Insurance as an Electrician
Most business insurance providers offer EL as either a standalone product or bundled within a tradesperson or electrical contractor policy. When comparing quotes, check:
- Minimum cover of £5 million — this is the legal minimum, but £10 million is standard and usually not much more expensive
- Retroactive cover — protects against claims for conditions or injuries that develop over time (e.g., industrial disease) and weren’t immediately apparent
- Waiver of subrogation — prevents the insurer recovering costs from a negligent employee, which is useful if you want to protect your working relationships
- Combined policy options — bundling EL with PLI and tools cover is usually cheaper and simpler than separate policies
Good starting points for electricians include Rhino Trade Insurance, Simply Business, and AXA Business Insurance — all of whom offer combined electrical contractor policies. Compare at least two or three quotes before buying, as premiums can vary significantly for the same level of cover.
EL vs PLI: The Quick Difference
These two policies cover completely different things. Both matter if you employ people.
| Employers Liability | Public Liability | |
|---|---|---|
| Who it protects | Your employees | Clients and the public |
| Legal requirement? | Yes, if you employ anyone | No — but practically essential |
| Minimum cover | £5 million | No legal minimum (£2m typical) |
| Triggered by | Employee injury/illness | Third-party injury/property damage |
| Typical cost (electricians) | £100–£300/year | £150–£450/year |
You can read more about PLI for electricians in our separate guide: Public Liability Insurance for Electricians: Costs, Cover & What You Need. If you’re also looking at your certification requirements, see our Electrician Qualifications UK guide.
Frequently Asked Questions
Do sole trader electricians need employers liability insurance? Not if you genuinely work alone with no employees. The legal requirement under the Employers’ Liability (Compulsory Insurance) Act 1969 only applies to businesses that employ other people. A sole trader who takes on no staff and uses only self-employed subcontractors (who work across multiple clients) is generally exempt.
Does EL insurance cover self-employed subcontractors? Not automatically. If your subcontractors are genuinely self-employed — they set their own hours, use their own tools, and work for multiple clients — they fall outside your EL policy and carry their own insurance. If they work only for you and under your control, the HSE may regard them as workers, meaning you need EL cover for them.
How much EL insurance do electricians need? The legal minimum is £5 million per claim. Most standard EL policies offer £10 million as a default. Given the potential severity of electrical injuries, it’s worth checking what your policy actually provides rather than assuming the maximum applies.
Do I need EL insurance for an apprentice? Yes. Apprentices are employees for the purposes of EL insurance — the requirement covers all workers, regardless of whether they’re full-time, part-time, on a fixed-term contract, or on an apprenticeship.
What happens if an employee is injured and I don’t have EL insurance? You face the daily fine from the HSE, plus personal liability for any compensation awarded in court. Electrical injury claims can easily reach £50,000–£200,000+ for serious cases. Without insurance, that comes out of your business — and, if you’re a sole trader, out of your personal assets.
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